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The Kelsey Report® White Paper

YP after IP: How Publishers Move beyond Their Core Business
Tom Maguire , 2/1/2000

EXECUTIVE SUMMARY: The Internet has irreversibly changed the Yellow Pages publishing business even though its present impact is minimal. Looking at revenue alone, the core printed directory still accounts for something on the order of 98 percent of Yellow Pages revenues. But such an evaluation ignores the contrast in growth rates between the single-digit print world and the astronomical interactive one.

The rapid growth of Internet-based businesses places Yellow Pages publishers on the horns of a dilemma. Publishers tell us that it is difficult to maintain growth rates of 6 percent or 7 percent based on print revenues alone. Meanwhile their diminutive, Web-based efforts double their revenues each year. Clearly, it's time to blend several product lines together in order to manage the migration from print to print alternatives.

TKG encourages publishers to use Internet-based products as the springboard to catapult the industry out of its 6 percent growth rut. The key barometer will be how well publishers use IP-based products to extend the franchise beyond the current roster of Yellow Pages advertisers.

Many companies in the U.S. have already begun to sell other advertising products (direct mail, cable TV, outdoor, etc.). However, the Yellow Pages sales force and sales techniques tailored around a single sales call each year are not conducive to introducing products at the speed of the Internet.

The Kelsey Group believes that Yellow Pages publishers and their sales forces should handle multiple marketing functions. Once YP sales people become "advertising consultants," they can push onward to sell other items, such as telecom services, Internet access and hosting services. Expanding the product line develops new revenue streams and offsets the slower growing, but still very viable, printed directory.

The expansion of the product line will cause publishers to change their sales structure and culture beyond once-a-year sales calls (a very difficult task). They must do this because the other media they are selling (Internet

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This published material is for internal client use only. It may not be duplicated or distributed in any manner not permitted by contract. Any unauthorized distribution could result in termination of the client relationship, fines and other civil or criminal penalties under Federal law. The Kelsey Group disclaims all warranties regarding the accuracy of the information herein and similarly disclaims any liability for direct, indirect or consequential damages that may result from the use or interpretation of this information.

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